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Presentation transcript:

Please pick up a Warm Up sheet from the folder on the table in front, get out a pen or pencil, and wait for today’s question to appear on the board.

Warm Up Why are monopolies bad for consumers?

Friday, March 6, 2015 Objective: Students will be able to explain why mergers and acquisitions occur. Purpose: Mergers and acquisitions change the market and can significantly affect the price of goods and services.

Reminders 57 schools days remaining You must pass this class in order to graduate

Mergers Merger: the combining of two businesses into a single business Many large corporations grew to their current sizes through mergers Examples: AT&T, Comcast, ExxonMobil, NFL, Office Depot

Acquisitions Acquisition: purchase of one business or company by another company or other business Usually refers to a purchase of a smaller firm by a larger one Reverse Takeover: when a smaller firm purchases a larger firm and keeps the name of the larger firm

Purposes for Mergers and Acquisitions To improve profits To enter new markets To diversify a company’s offerings To stay in business

After Mergers Successful mergers are due to the following factors: Synergy Efficient integration Establishment of a new company culture Many similarities between the companies merging Great communication between employees

Issues with Mergers and Acquisitions Possible factionalization of work force/lack of unity Alienation of customers Possible loss of jobs Legality: all mergers and acquisitions are reviewed by the Justice Department to see if the “new” company is not a _________. Is there still fair competition in that industry? Does the merger/acquisition create a monopoly?

Common Mergers Airlines Oil and Gas Telecommunications Banking TV/Internet providers

About the United-Continental merger of Issues with American Airlines-US Airways merger Top 10 worst mergers